When Creating a Cash-Flow Statement Certain Items Must Be Disclosed

question 18

Multiple Choice

When creating a cash-flow statement certain items must be disclosed separately because of their significance,including:

• A) Discounts received from suppliers.
• B) Interest, both received and paid.
• C) Discounts received from suppliers, and interest both received and paid.
• D) Dividends paid.
• E) Discounts received from suppliers and dividends paid.

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Definitions:

Adjustment

A change made to the book value of an asset or liability to accurately reflect its value.

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company.

FIFO Inventory Reporting

An approach to reporting inventory where the oldest stock is recorded as sold first; reiterates the First-In, First-Out method in financial statements.

Consistent Application

The principle that accounting rules and methods should be applied the same way in each accounting period to ensure comparability of financial statements.